Backing out of refi?

[Mommy_Mea]

We are less than a week away from closing on our refi, we have been approved, so we just need to sign the papers.

Since we locked our rate in December, the rates have dropped (nearly a 0.25%). I emailed our bank and asked if there was any chance to get the new rate, and he said no.

We could refi with our current bank (who we love and would prefer to stay with) for less than the rate lock.

Does anyone have experience backing out of a refi? We put down a deposit, so I know we will lose that. I feel a little torn ethically, but I know that is what the deposit it for...

[HIU8]

Honestly, I would talk to your lender. We just refinanced (paid our first payment a few weeks ago) and when my DH saw how much the rate had dropped again he was kicking himself. We got the lowest rate we qualified for but maybe that would change with the even lower rates now.

[ellies mom]

If you think it makes financial sense, then do it. I wouldn't feel bad "ethically" at all because Lord knows, the mortgage company isn't worried about it.

I would try and get a copy of the appraisal and see if your bank will accept it rather than having to pay for a second one.

[Mommy_Mea]

Honestly, I would talk to your lender. We just refinanced (paid our first payment a few weeks ago) and when my DH saw how much the rate had dropped again he was kicking himself. We got the lowest rate we qualified for but maybe that would change with the even lower rates now.

He said no to my initial request, but I figure we can press harder if we think we have a fallback position (our current bank). I am crunching the numbers to make sure it makes sense.

I also have to consider that we are doing a no-cost refi, so if rates really do drop and stay low, we can just refi again with this bank! Seems silly to do that though on their end, rather than just drop the rate.

[AnnieW625]

I would stick with what you have. Rates could go up again; not saying they will, but they could.

[elbenn]

Some banks will split the difference--so if they have dropped a quarter point, they will allow you to relock for 1/8 point less.

[Mommy_Mea]

Thanks, we are going to talk about it more tonight, but I think we are just going to move forward with the refi with the new bank. The savings aren't worth the hassle of backing out.

We may ask the new bank about how long we have to wait to do a new no-cost refi if rates stay low. Maybe that will motivate to meet us half way :)

[Binkandabee]

If you are getting a true no cost refi (meaning that you aren't paying anything up front and you aren't rolling anything into your principal balance) I would definitely stay with what you have. If not, it won't hurt to see what your current bank will do.

We just did a true no cost refi (with our current lender - Chase) and because it was no cost to us anywhere I really didn't care what the rate was...it was less than what we were paying!